SMUD, LADWP, and Municipal Utilities: Does Solar Still Make Sense?

Not all California utilities are the same. If you're served by a municipal utility like the Sacramento Municipal Utility District (SMUD), the Los Angeles Department of Water and Power (LADWP), or another public utility, your rates are typically lower than PG&E, SCE, or SDG&E. But does solar still make sense?

Municipal Utility Rates vs. Investor-Owned Utilities

Here's how the major California utilities compare in 2026:

• SDG&E: $0.45–$0.55/kWh (highest in the nation)
• PG&E: $0.39–$0.45/kWh
• SCE: $0.36–$0.42/kWh
• LADWP: $0.22–$0.30/kWh
• SMUD: $0.16–$0.24/kWh

When Solar Still Makes Sense with Municipal Utilities

• High usage households — If you use over 1,000 kWh per month, even SMUD's tiered rates can get expensive.
• EV owners — An electric vehicle can add 300–500 kWh per month to your usage, pushing you into higher tiers.
• Rate increase protection — SMUD and LADWP rates are rising too, just more slowly. Solar still locks in your cost at zero.
• LADWP solar programs — LADWP offers its own solar incentive program (SIP) that provides per-watt rebates on top of the federal tax credit.

SMUD's Solar Programs

SMUD offers net metering that credits solar customers for excess energy at a competitive rate. They also have programs for low-income households and community solar options for renters.

LADWP Solar Incentive Program

LADWP's Solar Incentive Program (SIP) offers rebates that supplement the federal ITC. Combined, LADWP customers can reduce their system cost by 40% or more. Plus, LADWP's net billing program gives solid credit for exported energy.

Bottom Line

Solar payback takes longer with municipal utilities (7–10 years vs. 4–6 years), but the 25-year savings are still significant — typically $30,000–$60,000. And as rates continue rising, that number grows.

See your estimated savings based on your specific utility, or request a personalized quote.